Trusts in Kansas
A trust is a legal agreement between a settlor (the maker of the trust) and a trustee who manages the trust and its assets for the beneficiaries of the trust.
The two basic types of trusts in Kansas are revocable trusts and irrevocable trusts. A revocable trust can be changed from the time it is created until the settlor dies. An irrevocable trust cannot be changed once it has been created and signed.
A living trust is created prior to a settlor’s death. It is typically a revocable trust which provides flexibility for changes to be made as needed or desired by the settlor. The settlor often serves as the trustee until they are incapacitated or pass away, at which time the successor trustee, also named in the trust, assumes the responsibility for managing the trust.
A trust is a complex legal document with significant tax, property, and estate implications. It should be created to complement a detailed estate plan. The first step you should take in creating a trust is retaining an experienced attorney who can guide you through the process. Your attorney’s knowledge regarding transferring property to the trust, tax consequences of the trust and its beneficiaries, and drafting a trust that will allow you to carry out your wishes is critical.
Why Having a Trust is Important
There are four key reasons why a trust — as opposed to just having a will — is important to your estate plan. A trust allows your estate to:
- Bypass probate — A trust, unlike a will, is not subject to probate. It still allows the trustee to pay debts and taxes and appoint a guardian for a minor child, but it need not be filed with the court and requires no public notice.
- Hold assets in the trust until a future date — The assets held in the trust need not be distributed immediately upon death. This allows the settlor, for example, to have the proceeds held in the trust and managed by the trustee until a minor beneficiary reaches adulthood.
- Be protected should you become mentally incapacitated — Should you become unable to manage your trust, the successor trustee would assume those responsibilities, not only managing the trust’s assets but ensuring that the trust takes care of your ongoing needs as well.
- Remain private and confidential — Because a trust is not subject to probate, and therefore never enters a court of law, the assets and terms of the trust never become part of the public record. Not only does it protect your privacy as the settlor, but the privacy of your beneficiaries as well.
Hire a Skilled Attorney
Even a trust with few assets can be complicated. There are issues with property and businesses owned by the trust, joint tenancy issues, and issues with minor beneficiaries, guardianships, and other beneficiaries such as charitable causes. Trusts can be a marvelous tool for avoiding unnecessary taxes and public scrutiny, but only if they have been carefully crafted by a Kansas estate planning attorney who knows how to do it well.